Extraterritorial Offices of Exchange

Extraterritorial Offices of Exchange (ETOEs) are businesses operated by – or in connection with – foreign postal operators. ETOEs perform a wide range of postal functions that can vary by country, but generally include consolidating, documenting, and transporting outbound international mail. Since the early 1960s, organizations have been using a practice called “remailing,” in which they bypass the national postal operator for delivery of outbound international mail service in order to access lower rates. The term ETOEs was later coined to describe this practice of foreign postal operators seeking to send dispatches directly to other countries from countries outside their own territories.

The recent growth in the international mailing and shipping market — recently estimated to be $1.5 trillion — will likely continue to fuel discussions on the role and impact of ETOEs and the terminal dues system. ETOEs were a topic taken up during the 2016 UPU Congress and UPU member countries agreed on changes to the terminal dues system during that meeting, but it continues to be a topic of debate among the international mailing and shipping community. The future of ETOEs and their operations in the U.S. is unclear. This paper explores ETOE operations, their oversight structure, and stakeholder perspectives.

Comments (1)

Nick Lether

Interesting report – I find it shocking that the State Department has no clue where the ETOEs are operating. I’m sure the OIG is able to compile a list from public business records and save the State Department the time needed to work on the ETOE licensing regulations. Some other things to consider in my opinion:
1. USPS spends millions of dollars yearly for costs associated with increased handling of ETOE shipments.
2. ETOEs should be required to register directly with the State Department and renew on a periodical basis.
3. ETOEs should not be able to take advantage of the terminal dues remuneration system.
4. All inbound and outbound ETOE items that enter the postal stream should be billed accordingly.
5. Recurring training for ISC employees/ground-handlers to recognize and record ETOE packages/receptacles.
6. Item-level verification for all international mail at ISC.
7. More participation by USPS managers in UPU committee boards and workgroups.
8. Continue to advocate for changing the designated IMPC codes for ETOEs at the UPU’s 2018 Extraordinary Congress.
9. The Postal Service should focus on a strategy that recognizes the projected growth for international postal mail and act soon.

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